Australian shoppers are predicted to spend $860 million on Father’s Day gifts this year, according to research by the Australian Retailers Association (ARA) in collaboration with Roy Morgan.

However, although 35 per cent of consumers said they plan to buy a gift, the research projects a “modest dip” in spending this year, down $12 million or by 1.3 per cent.

ARA CEO Paul Zahra said spending forecasts are “marginally down” given the current economic environment.

“Retailers will still be encouraged by the $860 million projected spend, which will provide a reprieve for some retailers from the intense pressure due to rising operating costs and an overall discretionary spending slowdown.”

About 18 per cent of respondents said they expect to spend on food and alcohol gifts while 10 per cent said they will spend on clothing, shoes and books and 6 per cent on music and games.

Zahra described the occasion as a “social family event” with consumers favouring food and alcohol as gifts.

“Father’s Day is another gift-giving event centred around giving back – and we find that when shoppers are showing appreciation for loved ones, they are more likely to splash out.”

• Further reading: As food prices soar, retailers face a discretionary spending downturn.